The Federal Circuit has ruled in IRIS Corp. v. Japan Airlines Corp. that the federal government may be liable for infringement in a patent infringement suit, when the infringement is at the direction of the federal government. The case involved a patent infringement suit brought by IRIS Corp. against Japan Airlines (JAL). IRIS alleged that JAL infringed its patented method of making secure identifications using passports embedded with RFID chips when the airline scanned passenger passports with such embedded chips at U.S. airports, notably JFK Airport in New York. JAL asserted that pursuant to Title 28 U.S.C. Section 1498(a), the airline was exempt from any liability associated with scanning requirements, because by federal law, the U.S. government required it to scan passenger passports. Title 28 U.S.C. Section 1498(a) provides that when the alleged infringement is “by or for the United States” and the alleged infringement occurs “with authorization or consent” of the federal government, the patentee may bring action in the Court of Federal Claims. JAL further asserted that IRIS’s only recourse for damages for the alleged infringement would be to bring a lawsuit against the federal government.

The U.S. District Court for the Eastern District of New York agreed with JAL, dismissing IRIS’s complaint against JAL, and the Federal Circuit affirmed that decision. The Federal Circuit reasoned that the federal government assumed liability under 28 U.S.C. Section 1498(a) because JAL could not operate in the United States without infringing the IRIS patents, and it had also benefited from the airline’s alleged infringing activities by improved national security, reduced passport fraud, and lowered overall demand on federal government resources in protecting airline passengers and national security. In the words of the Federal Circuit, “the government benefits here because JAL’s examination of passports improves the detection of fraudulent passports and reduces demands on government resources.”

The IRIS decision has the potential to impact any business that contracts with the government, or carries out government functions, including in the transportation, shipping, security, information technology, natural resources extraction, and other sectors. Government contractors and any other business in a heavily regulated industry should be aware of the potential for raising a Title 28 U.S.C. Section 1498(a) defense in the event of alleged patent infringement.

If you have questions about patent infringement, you need an experienced attorney. Anna Vradenburgh is a well-respected, business-minded expert in intellectual property issues. Anna assists clients in patent and trademark prosecution, and represents clients in trademark opposition matters, domain name dispute matters, and patent and trademark litigation. Anna can also assist your company in all manner of intellectual property protection. For more information, visit her website, or contact Anna at (818) 488-8146. This article is for educational purposes only and nothing in this article is intended to be, nor should be considered legal advice.